UK inflation rate rises to 10.1%

The UK inflation rate has returned to 10.1%, with the cost of living rising at its fastest rate in 40 years, official figures show.

Soaring living costs are eating into household budgets, with prices rising faster than wages.

The Bank of England has said inflation could peak at 11% this year.

September's inflation figures are usually used to calculate next April's rise in the state pension and the increase in some benefits.

It is unclear, however, if the government still intends to stick to this policy or cut down on its spending by increasing payments by a lower level by linking the rise to wages instead.